Weaker Pricing on the Horizon—Higher prices have been key in driving the industry’s robust financial performance over the last three years. However, that trend is unlikely to last as cash-strapped consumers begin to delay upgrading their telecom packages. That will lead to weaker price growth than in recent history. Although industry profitability will remain elevated, weak pricing will put downward pressure on margins throughout the forecast.
NAFTA 2.0—Even though the industry has little direct impact on trade balances, telecommunications finds itself as one of the industry’s singled out for targeted action by the U.S. administration because of foreign-ownership restrictions. The outcome of these negotiations has the potential to completely reform the existing dynamics within the industry.
Just infrastructure?—Despite the plethora of productivity-improving opportunities that are supported by the infrastructure and services that telecommunication firms provide, industry output and employment growth have been extremely weak over the past five years.